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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): January 30,1997
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STERIS CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Ohio 0-20165 34-1482024
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(State or Other (Commission File (IRS Employer
Jurisdiction of Number) Identification No.)
Incorporation)
5960 Heisley Road, Mentor, Ohio 44060-1868
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (216) 354-2600
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Former Name or Former Address, if Changed Since Last Report: N/A
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ITEM 5. OTHER EVENTS
On January 30, 1997, the Registrant issued a press release announcing
its earnings for the three month period and nine month period ended
December 31, 1996. This press release is attached as Exhibit 99.1
to this report and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION,
AND EXHIBITS
(c) Exhibits
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99.1 The Registrant's January 30, 1997, press release announcing
its earnings for the three month period and nine month
period ended December 31, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
STERIS CORPORATION
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(Registrant)
Date: January 31, 1997 By:/s/Michael A. Keresman, III
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Michael A. Keresman, III
Senior Vice President and CFO
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Exhibit 99.1
STERIS CORPORATION LOGO
PRESS ANNOUNCEMENT FOR IMMEDIATE RELEASE
Contacts: Bill R. Sanford, Chairman, President, and CEO
Michael A. Keresman, III, Senior Vice President and CFO
(216) 354-2600
STERIS REPORTS FISCAL 1997 THIRD QUARTER RESULTS
BOARD AUTHORIZES REPURCHASE OF UP TO 3,000,000 SHARES
Mentor, Ohio (January 30, 1997) -- STERIS Corporation (NASDAQ:STRL) today
reported financial results for its fiscal 1997 third quarter ended December 31,
1996. In addition the Company announced that its Board of Directors has
authorized the periodic repurchase of up to 3,000,000 STERIS common shares in
the open market.
Net revenues for the fiscal third quarter were $151.0 million. Net income was
$13.5 million, or $0.38 per share. In the prior year quarter revenues were
$163.6 million with net income of $17.6 million, or $0.50 per share.
Through nine months of fiscal 1997, revenues were $417.4 million compared to
$416.8 million in the first nine months of the prior year. Income before
non-recurring items in the latest nine months was $34.8 million, or $0.98 per
share, compared to last year's nine months net income of $33.9 million, or $0.98
per share.
The prior year totals reflect pooling of interests accounting associated with
STERIS's acquisition of Amsco International, Inc. in May 1996. Approximately
1,000,000 additional shares were used in the earnings per share calculations in
the current fiscal year compared to the prior fiscal year.
Revenues for the fiscal third quarter increased 9.0% from this year's fiscal
second quarter which were 8.3% ahead of the fiscal first quarter. Since
completing the acquisition of Amsco, the Company has reported increasing
quarterly revenues of $127.9 million, $138.5 million, and $151.0 million in the
first, second, and third fiscal quarters, respectively. Net income as a percent
of revenues also continued a similar quarterly trend, from 7.6% to 8.3% to 9.0%
in the just completed third quarter.
Bill R. Sanford, STERIS's Chairman, President, and Chief Executive Officer,
stated, "During our third quarter STERIS continued to build a premier company to
best meet our Customers' needs for infection prevention, contamination control,
and surgical support products, services, and technologies. Although the third
quarter financial results were below expectations for the quarter itself, we
currently believe that we will exceed our objective of 20% net income growth,
exclusive of non-recurring items, for the 1997 fiscal year which ends March 31.
We expect the sequential quarterly growth of the first three quarters to
continue through the fiscal fourth quarter."
Mr. Sanford further commented, "STERIS completed the acquisition of Amsco in
mid-May and has been working on an aggressive timetable in the last seven and
one-half months to consolidate and integrate the businesses. At the end of the
third quarter we were on or ahead of schedule in the major operational aspects
of the business combination, including domestic sales and service consolidation,
facilities closings and operations relocations, and systems integration.
"This year's quarterly revenue objectives were based on combined historical
trends which showed the December quarter to have significantly higher sales
volume than the March quarter because of the weighting of the Amsco capital
equipment business. Amsco sales were historically back-end loaded each quarter.
Prior to the acquisition, Amsco operated on a calendar year basis. In past years
the December quarter sales volume was disproportionately strong with substantial
sales being recognized during the week following Christmas.
"During the just completed quarter, the expected December month-end sales
increase did not occur. We believe this was because of the combined effects of
several factors: (1) the learning curve demands associated with the October
implementation of our newly consolidated domestic sales organization; (2) a new
sales compensation program that eliminated specific ties to calendar year-end
results; and (3) the mid-week holidays in December. Just as the third quarter
sales performance was not consistent with the historical trends, we believe the
same will be true in the opposite direction in our fiscal fourth quarter."
STERIS CORPORATION M 5960 Heisley Road M Mentor, Ohio 44060 M 216-354-2600
<PAGE> 2
Discussing other significant accomplishments in the quarter, Mr. Sanford said,
"Sales of STERIS 20(TM), the Company's proprietary single-use sterilant
concentrate, were a new quarterly record high of over 1.7 million units.
Sterilant sales through nine months were approximately 40% ahead of the prior
year-to-date total. An international milestone for the Company was reached with
the sale of the 1,000th STERIS SYSTEM 1(TM) Sterile Processing System outside
the U.S.A.
"In late December STERIS completed the acquisition of the assets of the
infection control and contamination control businesses of Calgon Vestal
Laboratories from Bristol-Myers Squibb Company. The acquisition expands STERIS's
consumable product lines for surface cleaning and decontamination and provides
significant opportunities for vertical integration and new product development.
New product introductions during the quarter included the VERIFY(TM) private
label line of rapid readout biological monitors that were developed at the
recently acquired Surgicot business operation. The VERIFY line fills an
important void in the Company's current product offerings. Also in late
December, the FDA notified STERIS that Amsco had been removed from FDA's
Application Integrity Policy which had been in effect since January 1995."
Mr. Sanford concluded, "We are pleased with the continued progress of the
Company. Our sales and customer support capabilities are solid. Our
international business is expanding. Our sales mix of equipment and recurring
revenues from consumables and services is moving toward our 50/50 target. Our
profit margins are improving. Our balance sheet is healthy. Our management team
believes that we will achieve our major objectives for the full fiscal year of
the new, larger STERIS. The STERIS Board of Directors feels that STERIS shares
are currently undervalued in the market. Therefore, the Board has authorized the
periodic repurchase of up to 3,000,000 common shares with the amount and timing
dependent upon market conditions."
STERIS Corporation is a leading provider of infection prevention,
contamination control, and surgical support systems, products, services, and
technologies to healthcare, scientific, research, and industrial Customers
throughout the world. The Company has approximately 4,000 Associates (employees)
worldwide, including more than 1,000 direct sales, service, and field support
personnel. Customer Support facilities are located in major global market
centers with manufacturing operations in the United States, Canada, Germany, and
Finland.
* * *
This press release contains statements concerning certain trends and other
forward-looking information affecting or relating to the Company and its
industry that are intended to qualify for the protections afforded
"forward-looking statements" under the Private Securities Litigation Reform Act
of 1995. There are many important factors that could cause actual results to
differ materially from those in the forward-looking statements. Many of these
important factors are outside STERIS's control. Changes in market conditions,
including competitive factors and changes in government regulations, could cause
actual results to differ materially from the Company's expectations. No
assurance can be provided as to any future financial results. Other potentially
negative factors that could cause actual results to differ materially from those
in the forward-looking statements include (a) the possibility that the
continuing integration of acquired businesses will take longer than anticipated,
(b) the potential for increased pressure on pricing that leads to erosion in
profit margins, and (c) the possibility of reduced demand, or reductions in the
rate of growth in demand, for the Company's products.
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STERIS CORPORATION
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31 DECEMBER 31
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1996 1995(1) 1996 1995(1)
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<S> <C> <C> <C> <C>
NET REVENUE...................................... $151,005 $163,623 $417,363 $416,762
Cost of goods and services sold................ 91,231 101,323 256,978 259,853
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GROSS PROFIT................................. 59,774 62,300 160,385 156,909
Costs and expenses:
Selling, general, and administrative......... 32,505 29,388 86,193 87,908
Research and development..................... 5,425 4,651 15,598 12,712
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37,930 34,039 101,791 100,620
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INCOME FROM OPERATIONS........................... 21,844 28,261 58,594 56,289
Other income................................... 523 300 1,372 398
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INCOME BEFORE TAXES AND NON-RECURRING ITEMS...... 22,367 28,561 59,966 56,687
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Income taxes................................... 8,832 11,009 25,188 22,765
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INCOME BEFORE NON-RECURRING ITEMS................ 13,535 17,552 34,778 33,922
-------- -------- -------- --------
Non-recurring items (2)........................ 0 0 (81,300) 0
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NET INCOME (LOSS)............................ $ 13,535 $ 17,552 ($46,522) $ 33,922
======== ======== ======== ========
INCOME BEFORE NON-RECURRING ITEMS PER SHARE...... $ 0.38 $ 0.50 $ 0.98 $ 0.98
NET INCOME (LOSS) PER SHARE...................... $ 0.38 $ 0.50 ($ 1.39) $ 0.98
======== ======== ======== ========
WEIGHTED AVERAGE NUMBER OF SHARES (3)............ 36,089 35,041 35,508 34,637
======== ======== ======== ========
</TABLE>
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1996 1996
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<S> <C> <C>
ASSETS
Current assets.................................................... $294,060 $367,693
Property, plant, and equipment, net............................... 94,232 93,746
Other assets...................................................... 165,743 134,563
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TOTAL........................................................... $554,035 $596,002
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities............................................... $151,717 $125,086
Other liabilities................................................. 112,788 166,857
Shareholders' equity.............................................. 289,530 304,059
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TOTAL........................................................... $554,035 $596,002
======== ========
</TABLE>
SUMMARY OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
QUARTER ENDED DECEMBER DECEMBER 31
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
DECEMBER 31 DECEMBER 31
--------------------- ---------------------
1996 1995(1) 1996 1995(1)
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<S> <C> <C> <C> <C>
Revenues......................................... $151,005 $163,623 $417,363 $416,762
Income excluding non-recurring items............. $ 13,535 $ 17,552 $ 34,778 $ 33,922
Non-recurring items.............................. $ 0 $ 0 $(81,300) $ 0
Net income (loss)................................ $ 13,535 $ 17,552 $(46,522) $ 33,922
Per share excluding non-recurring items.......... $ 0.38 $ 0.50 $ 0.98 $ 0.98
Net income (loss) per share...................... $ 0.38 $ 0.50 $ (1.39) $ 0.98
</TABLE>
(1) The statements of operations for the three months and nine months ended
December 31, 1995 are presented to comply with the accounting treatment
required for a "pooling of interests" whereby STERIS and Amsco are shown as
if merged for all periods included above.
(2) Non-recurring charges of $81.3 million net of tax, or $2.44 per share,
relate to costs incurred in connection with the Amsco merger. These charges
include transaction costs of $15.0 million and restructuring charges for
eliminating redundant assets, executive employment agreements and other
planned employee severance, write-off of goodwill related to certain
operations and other merger-related activities.
(3) The weighted average number of common shares used in calculating income
before non-recurring items per share includes weighted average shares
outstanding and the effects of potentially dilutive securities (stock
options).
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STERIS CORPORATION LOGO
STERIS CORPORATION
5960 Heisley Road - Mentor, OH
44060
Infection Prevention and
Surgical Support ... Worldwide
PRESS ANNOUNCEMENT
PLEASE OPEN IMMEDIATELY
